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Sandvine reports Q4 and fiscal year 2011 results

WATERLOO, ON, Jan. 12, 2012 /CNW/ - Sandvine, (TSX: SVC) (AIM: SAND) a
leading provider of intelligent network policy control solutions for
fixed and mobile operators, today reported revenue of $20.6 million and
a GAAP net loss of 3.6 million (non-GAAP1 loss of $2.8 million) for its fourth quarter of 2011. Fiscal year 2011
revenue was $89.3 million and the GAAP net loss was 5.8 million
(non-GAAP1: $2.2 million loss). All results are reported in U.S. dollars.

Awarded $4.5 million expansion order for Network Analytics by Tier 1 US
MSO

Won industry award for "Best Implementation of Tiered Data Pricing" for
its Usage Management product and another industry award for its Network
Analytics product

David Thomson, strategy consultant and bestselling author of Blueprint to a Billion joined Sandvine's Board of Directors

"We added 44 new customers in 2011 and have the largest and most
diversified customer base in our industry. We also offer the broadest
portfolio of Network Policy Control solutions in the market. In 2012
our goal is to return to revenue growth and profitability by leveraging
the value of our newest solutions for existing customers and continuing
to add new customers across markets," said Dave Caputo, Sandvine's
President and CEO.

FINANCIAL HIGHLIGHTS (All amounts are in U.S. dollars)

Millions of dollars, except per share data and where otherwise indicated

Q42011

Q32011

Change

Q42010

Change

Revenue

20.6

25.6

-19.4%

24.2

-14.7%

Gross Margin percent

72%

76%

-4pp

72%

Nil

R&D, SG&A

15.8

16.6

-4.5%

14.7

7.6%

Net Income (Loss)

-3.6

0.5

-

0.6

-

Diluted Earnings (Loss) Per Share

-0.026

0.004

-

0.004

-

Non-GAAP1 Income (Loss)

-2.8

1.5

-

1.4

-

Non-GAAP1 Diluted Income (Loss) Per Share

-0.020

0.010

-

0.010

-

Sandvine's cash, cash equivalents and short term investments balance at
the end of the fourth quarter remained strong at $74 million (August
31, 2011: $75.1 million).

CONFERENCE CALL
The Company will discuss the financial results and business outlook on a
conference call at 8:30 a.m. Eastern time (1:30 BST) today. A webcast
will be available on Sandvine's website.

Local dial-in numberToll-free North AmericaToll-free United Kingdom

416 644 3415
877 974 0445
0800 358 5256

A replay of the call will be available at 416-640-1917 or toll-free at
877-289-8525 (passcode 4499834#) from approximately 10:30 a.m. Eastern
time today through January 19.

ABOUT SANDVINE
Sandvine's network policy control solutions focus on protecting and
improving the quality of experience on the Internet.

CAUTION REGARDING FORWARD LOOKING INFORMATION
Certain statements in this press release which are not historical facts
constitute forward-looking statements or forward-looking information
within the meaning of applicable securities laws ("forward-looking
statements"). Statements related to Sandvine's projected revenues,
earnings, growth rates, revenue mix and product plans are
forward-looking statements as are any statements relating to future
events, conditions or circumstances. The use of terms such as "may",
"anticipated", "expected", "projected", "targeting", "estimate",
"intend" and similar terms are intended to assist in identification of
these forward-looking statements. Readers are cautioned not to place
undue reliance upon any such forward-looking statements. Such
forward-looking statements are not promises or guarantees of future
performance and involve both known and unknown risks and uncertainties
that may cause the actual results, performance, achievements or
developments of the Company to differ materially from the results,
performance, achievements or developments expressed or implied by such
forward-looking statements. Forward-looking statements are based on
management's current plans, estimates, projections, beliefs and
opinions, and the Company does not undertake any obligation to update
forward-looking statements should assumptions related to these plans,
estimates, projections, beliefs and opinions change.

Many factors could cause the actual results of the Company to differ
materially from the results, performance, achievements or developments
expressed or implied by such forward-looking statements, including,
without limitation, each of the following factors, and those factors
which are further discussed in the Company's Annual Information Form
("AIF"), a copy of which is available on SEDAR at www.sedar.com.

The Company's revenues may fluctuate from quarter to quarter and year to
year depending upon sales cycles, customer demand and the timing of
customer purchase decisions;

The Company's gross margins may fluctuate from period to period
depending upon a variety of factors including product mix in the
quarter, competitive pricing pressures and the level of sales generated
through indirect channels;

The Company is dependent upon and expects to continue to derive a large
percentage of its revenue from both a small number of key customers and
key reseller partners, none of whom are bound to any fixed purchase
commitment or exclusivity obligations and could change their buying
patterns and/or source of supply at any time, which could have a
material impact on the Company's revenues. The Company's reseller
partners may offer their own products which are competitive with the
Company's products;

The Company faces intense competition in markets where there are
typically several different competing technologies and rapid
technological changes. The Company faces the risk of emergence of new
technologies that may be either competitive to those of the Company or
that change the requirements of the Company's customers for solutions
such as those offered by the Company;

The Company's growth is dependent on the development of the market for
network policy control solutions and the decisions of the Company's
target customers to deploy and further invest in those technologies,
which decisions may be impacted upon by changing requirements in the
area of broadband network management policies and/or changes in the
regulatory framework to which the Company's customers may be subject.
In particular, numerous telecommunications legislators and regulators
in various jurisdictions have considered or are considering what, if
any, regulations might be appropriate with respect to how internet
service providers manage the impact of different types of traffic on
their networks. These ongoing processes may cause uncertainty in the
network investment decisions of the Company's target customers, and any
new rules or regulations that result from these considerations may
impact the demand for the Company's products within various markets,
including markets that may not be considering any new regulation but
where the Company's customers may look to other markets for future
guidance or trends;

The majority of the Company's operating expenses are denominated in
Canadian dollars, U.S. dollars and New Israeli Shekels. The Company's
earnings are impacted by fluctuations in the exchange rates between the
U.S. dollar and these currencies.

Table 1

1. Non-GAAP Financial Measures

The following table provides a reconciliation of GAAP net income (loss)
and related per share amounts to non-GAAP net income (loss) and the
related per share amounts for the periods indicated. These non-GAAP
financial measures which are used internally by management to evaluate
the Company's ongoing performance exclude the impact of stock based
compensation, amortization of intangible assets acquired through
business acquisitions and goodwill and intangible impairment expenses
(collectively referred to as "Excluded Expenses"). The Company
provides these non-GAAP financial measures as it is the Company's view
that the Excluded Expenses are either (i) not part of its normal
day-to-day operations and/or (ii) represent a "non-cash" accounting
charge that does not deplete its cash resources. Accordingly, the
Company believes that such financial measures may also be useful to
investors in enhancing their understanding of the Company's operating
performance. Non-GAAP net income (loss) is not recognized under
Canadian GAAP and does not have a standardized meaning prescribed by
Canadian GAAP. Therefore it is unlikely to be comparable to similarly
titled measures reported by other issuers. Non-GAAP financial measures
should be considered in the context of the Company's GAAP results.

Three month period ended

Twelve month period ended

November 302011$

August 31 2011$

November 302010$

November 302011$

November 302010$

Amounts in US$ thousands

Net income (loss)

(3,635)

522

603

(5,763)

4,713

Excluded Expenses

Stock based compensation expense

650

752

631

2,760

2,631

Amortization of intangible assets acquired through business acquisitions